Investors in Toyota encouraged to vote against chair from founding family

Toyota’s Chairman Akio Toyoda Faces Pressure from Proxy Advisory Firms

Toyota’s proposal to re-elect Chairman Akio Toyoda to its board is facing opposition from two leading proxy advisory firms, urging shareholders to vote against the founding family scion. Institutional Shareholder Services (ISS) and Glass Lewis have both recommended withholding support for Toyoda, citing various issues within the Toyota group.

ISS highlighted improper vehicle testing by subsidiary Daihatsu and regulatory violations by Toyota group affiliates Hino and Toyota Industries as reasons to vote against Toyoda. Glass Lewis also recommended a no vote for the chairman for a second year in a row, pointing to his responsibility for an insufficiently independent board.

Toyoda, who has been the face of the company for many years, has faced criticism for his approach to vehicle electrification, which is seen as less aggressive than that of other global automakers. Despite winning re-election with 85% of the vote last year, down from 96% in 2022, Toyoda’s position is now under scrutiny ahead of the upcoming annual shareholders meeting on June 18.

The recommendations from the proxy advisory firms come at a time when corporate shareholder meetings in Japan are typically pro forma, with company-backed directors usually winning solid majorities. However, the pressure on Toyoda signals a potential shift in shareholder activism within the Japanese corporate landscape.

As shareholders prepare to make their voices heard at the upcoming meeting, the outcome will be closely watched to see if Toyoda can maintain his position as chairman of the world’s largest carmaker.